Friday, June 05, 2009

DotW: Open Your Mind

To the possibilities...

The week started off on a positive note with the interesting news that AstraZeneca and Merck had come together to conduct a clinical trial combining their two promising but early stage oncology assets. Can you imagine? Two pharmaceutical companies actually pooling assets (see below).

While we are more interested about what potentially could come next--will this lead to future pipeline sharing deals, for instance?--we admit to being impressed by the news, and are almost willing to say that the tie-up counts as one of this year's most interesting deals (the other being the GSK/Pfizer joint-venture in HIV, of course).

Who else opened their minds this week? Shareholders at Biogen Idec seemed swayed by the arguments of "Team Icahn", awarding at least one board seat to the dissident shareholder group. Alex Denner, the managing director of Icahn Partners, will definitely get to participate in regular Biogen Idec confabs. No word yet on whether Richard Mulligan--the other Icahn supporter--has also won a seat at the table. (All we know is someone is taking a Mulligan here.)

Elan investors certainly see the hope of an impending sale after a week that was rife with rumors. First BMS was interested in a minority stake and then they weren't. On Thursday, the Financial Times reported that Pfizer was sniffing around the biotech. It's not the first time the New York behemoth's name has been linked with Elan. Why, pray tell, would Pfizer, still embroiled by the integration of Wyeth, want to purchase the company? Maybe it likes the data associated with Elan's Phase III mAB for Alzheimer's disease, bapineuzimab. Thanks to the Wyeth purchase, it already owns a piece of the molecule anyway. If the data are stellar, why not take the risk and own it all? And if they aren't? We assume Pfizer will be on to its next acquisition target by then anyway.

Novavax may open its mind to taking advantage of the uptick in its share price by raising additional money. Investors have swarmed into the biotech, in part because of the company's novel technology to develop a vaccine for the H1N1 flu strain. An agreement with the National Institutes of Health to evaluate a potential vaccine, announced Friday, only added to the excitement.

See? The possibilities are endless when you just open your mind and read...

AstraZeneca/Merck: Does the tie-up announced Monday June 1 between AstraZeneca and Merck to test a combination of two early-stage oncology candidates represent a more enlightened approach to deal-making? It's too soon to tell given the limited nature of this first collaboration, which pairs Merck's MK-2206, an AKT inhibitor, with AZ's mitogen-activated protein kinase 1 blocker, AZD6244 (also known as ARRY-886) in a soon-to-commence Phase I safety and tolerability trial. MK-2206 is currently in Phase I trials as a monotherapy; AZ's '6244 in a bit further along, having completed several Phase II studies. Both represent the most advanced molecules in their respective classes.

The very fact that the tie-up happened at all is proof that the industry is taking an important step forward in how it thinks about building innovative pipelines (though we would have been more impressed if the firms' business development groups had come up with the concept). In what is sure to become one of the most repeated stories on the origin of a partnership, the pact has its roots in a security line in the Dublin airport back in 2007. Somewhere between removing their shoes and coats and placing their laptops on the X-Ray machine, the two scientists got to chatting about how sensible it would be to collaborate given the increasing importance of combination therapy in oncology. Eighteen months later the deal came to fruition, with the blessing of Merck's chief strategy guru Mervyn Turner and AZ's BD ace John Goddard.

The reason so few Big Pharma-Big Pharma development deals get done is that they're very tricky. Issues related to control, valuation, and overlap with other, non-partnered projects must be hammered out before two large companies can come together in even basic ways. Indeed one reason it may have taken so long to forge this seemingly simple pact is that both Merck and AZ are developing competing MEK and AKT inhibitors. With multiple targets in each pathway and the potential to be used to treat a number of different cancers, the possible variations on a deal (it is not as well known as Brahms's famous opus) were "overwhelming", said Merck's Turner.

As a result, the companies are starting slowly, taking a step-wise approach to collaboration that need not go beyond this Phase I program. According to Turner, "We decided, let's start with the easy part, work out how we'll do these experiments together in patients in Phase I, and if that succeeds, we'll go on to the next part," he says. If the eventual goal is some sort of fixed-dose combination, the companies will eventually have to jump in with two feet, perhaps partnering on multiple compounds or even entire pathways.--Christopher Morrison

GlaxoSmithKline/Concert Pharmaceuticals: This deal was heavy, man. Just weeks after announcing it had been granted patents by the USPTO, Concert Pharmaceuticals inked a deal with GlaxoSmithKline on June 2 to gain access to the biotech's deuterated technology. The biobucks were sky-high, but the upfront GlaxoSmithKline agreed to pay was quite down-to-earth: just $35 million, which included $16.7 million for equity that was priced at a similar level to shares Concert issued when raising its $37 million 2008 Series C. In exchange, the big drugmaker gets option rights to multiple Concert projects, including CTP-518, a deuterated version of Bristol Myers-Squibb's HIV protease inhibitor atazanavir that is scheduled to enter Phase I trials later in 2009.

Like most of GSK's previous option-deals, the Big Pharma can buy into a program at clinical proof-of-concept (generally post Phase IIa but in the case of '518 post Phase I). Concert will also create deuterated versions of three additional molecules for GSK, and hand those off after lead optimization. The deal's milestones total more than $1 billion and are heavily weighted to the three option candidates, says Concert's chief business officer Steve Bernitz. What's more, the majority of the payments are for clinical and regulatory accomplishment, as opposed to sales-based payments. Concert will get a double digit royalty on compounds from its pipeline and an undisclosed royalty on deuterium-containing molecules from GSK's pipeline.

Replacing hydrogen atoms with deuterium atoms (hydrogen atoms saddled with a neutron) may be the ultimate in life cycle management since it allows for the creation of new chemical entities that get around existing composition-of-matter IP. And it's a low risk approach to drug development, since "it does not change the physical characteristics of a drug," president and CEO Roger Tung, PhD, told IN VIVO Blog. Because deuterium forms stronger bonds with other atoms in comparison with hydrogen due to its greater mass, Tung believes deuterated versions of medicines are likely to be metabolized differently, an important fact that can potentially affect safety, tolerability--and potentially efficacy. While this has yet to be proven in the clinic, it could mean that certain "problem" drugs might be salvaged by the substitution of deuteriums for hydrogen.

Interestingly, given the importance of '518 to the deal, one might have assumed that Bristol Myers-Squibb was interested. Tung confirms that Concert talked to BMS prior to inking the pact with GSK, but it's unclear whether BMS was ever in the running for the compound. BMS's version of atazanavir, Reyataz, remains on patent and will likely still be protected by the time Concert's '518 hits the market.--Christopher Morrison

OrthoBiotech (Johnson & Johnson)/National Cancer Institute: Topping off a busy day Thursday in which the diversified drug maker touted its robust late stage pipeline, Johnson & Johnson's OrthoBiotech division announced a five-year cooperative research and development pact (otherwise known as a CRADA) with the National Cancer Institute. As NCI's involvement implies, the pact is focused on developing novel cellular immunotherapies as potential treatments for a variety of cancers including melanoma. Steven Rosenberg, who is chief of NCI's surgery branch, will help lead the research effort.

The deal is interesting on a number of levels. It continues to show J&J's commitment to doing deals with a wide variety of players, from consortia to academic collaborators to industry groups. As "The Pink Sheet" DAILY notes, this external focus mirrors an industry-wide trend. (Recall GSK's efforts to biotech itself and Lilly and Merck's FIPNet strategies.) J&J's worldwide chairman for pharmaceuticals Sheila McCoy echoed this sentiment in her comments at the drug maker's R&D confab, noting such deals "allow you to diversify. The trend is to look at consortia in certain areas... [There's] a lot of discussion about how to share capabilities." In January , J&J's Janssen unit announced a deal with Vanderbilt University; in March, Centocor signed a deal with the University of Michigan.

Diversity in terms of both molecules and therapeutic approaches is important, but so is curbing risk. And what could be more risky--the apparent success of Provenge notwithstanding--than cancer immunotherapy? NCI's Rosenberg is a pioneer in the field, working in recent years to develop technologies to alter a patient's T cells to express specific immunity against cancer cells. Despite the controversy surrounding the space, OrthoBiotech has also dabbled in cancer immunotherapy, developing an approach designed to stimulate a patient's immune system to recognize and attack cancer cells via the administration of tumor antigens and other materials. Now Rosenberg's lab will conduct a clinical trial in melanoma patients using OrthoBiotech's proprietary technology.

"This public-private partnership represents an extraordinary opportunity to bring together complementary and substantial expertise and resources from two groups with the common goal of advancing a highly promising new modality of therapy for patients with cancer," said Jay Siegel, chief biotechnology officer of J&J's Pharmaceuticals and Medical Devices and Diagnostics businesses.

Microsoft/Merck: Ever since Merck announced in October 2008 the closure of Rosetta Inpharmatics, a genomic-information software company it purchased in 2001 for $576 million, execs have speculated about the ultimate fate of the bio-IT group's assets. Speculation only increased in February after Stephen Friend, Rosetta's founder and one of the prime defenders of these kinds of tools, announced he was leaving Merck to found Sage, a new, not-for-profit, open-source initiative that will develop biological networks across tissues and organs that model disease. (For more see this March START-UP story and this April IN VIVO piece. )

Now we know. On June 1, Microsoft announced it was buying "certain assets"--code for some but not all of Rosetta's powerful software. According to genomeweb's BioInform, the deal centers around Rosetta's Resolver, Elucidator, and Syllego programs, although financial details of the deal were not disclosed.

Why are we covering it? Because the deal marks an important step forward in Microsoft's quest to play in the life sciences. And Microsoft is big enough and creative enough (notwithstanding the ludicrous decision to saddle its new search engine with the unfortunate acronym But It's Not Google) that it must be taken seriously. Microsoft plans to incorporate the genetic and genomic data-management software into Microsoft Amalga Life Sciences, which helps research organizations assemble data from disparate platforms that can be located internally or externally. Merck will remain a contributor as well. According to the WSJ, Merck will provide strategic input regarding the program's use and will become an Amalga customer.

AstraZeneca/Abbott: On June 4, AstraZeneca and Abbott announced a co-promotion agreement for their investigational Crestor/TriLipix compound, as well as their submission of a new drug application with the FDA for the product in mixed dyslipidemia (basically a combination of two or more lipid abnormalities including high LDL-cholesterol, high triglycerides and low HDL-cholesterol.)

The co-promotion extends the two drug makers' existing commercial relationship--the original deal was inked in 2006--ahead of an FDA decision on the combo product, which will be marketed as Certriad if approved. TriLipix, a delayed-release fenofibrate approved in December 2008, is Abbott's play to build on the success of the older fenofibrate brand TriCor.

As "The Pink Sheet" DAILY writes, Certriad is an important product for both Big Pharmas, but especially Abbott given that TriCor will face generic competition in just two years. As part of the agreement, AstraZeneca gains non-exclusive rights to sell TriLipix alongside Abbott in the U.S., excluding Puerto Rico. Abbott agreed to co-promote AstraZeneca's Crestor under similar terms last August.

The American Heart Association estimates that about 34 million people in the U.S. are affected by mixed dyslipidemia. But despite this huge opportunity, the drug will face an increasingly competitive market for similar fixed-dose combination CV products. For example, Daiichi Sankyo is developing a triple combination product combining its antihypertensive Azor with hydrochlorothiazide, and Merck and Schering-Plough have a combination of Zetia and Pfizer's Lipitor in development.

(Image courtesy flickrer mythic_moonlight, used with permission through a creative commons license.)

1 comment:

Anonymous said...

Relative to GSK/Concert Deal there will have to be a new definition of "Me-too" drugs that are so oft criticized as any D-analog would be the ultimate illustration with current classification moved down several levels. These compounds are a bit like someone wearing the same clothes everyday except changing underwear and socks: Might not be able to see any differences unless the socks clash.

I do not understand the business model on these. As NCEs they will require full Clinical Trials and NDA submission (although most the chemistry/supply chain probably only tweaked). By the time they get approved will probably be competing with Generics so unless big advantages in safety/efficacy what is the market potential?

Frankly as a Chemist the fact they can get solid Patent coverage is astonishing to me. Replacement of H-atom with D-atom would seem obvious to sophomores in Org Chem, as would expectation of some differences in metabolism and perhaps other safety profile (good and bad possibilities). If significant enough to be useful there might be room to Patent as an "improvement" but a core Composition of Matter claim is a stretch. (Tung is technically incorrect as some physical characteristics will be different, such as NMR, IR and MW, although these typically do not have clinical meaning since are applicable for analysis purposes).